Creditcoin, a platform focused on real-world asset innovations, has announced a major upgrade to its mainnet, transitioning to the nominated proof-of-stake (NPoS) consensus mechanism. This move aims to enhance on-chain liquidity for borrowers and fintech lenders, prioritizing auditability, transparency, and trust.
Transitioning From Proof-of-Work to Proof-of-Stake
While Bitcoin introduced the concept of proof-of-work (PoW) in 2009, concerns regarding energy consumption and carbon emissions have prompted blockchain projects to seek more eco-friendly alternatives. Ethereum, for instance, migrated to proof-of-stake (PoS) in 2022 to reduce its carbon footprint and enhance scalability.
Nominated Proof-of-Stake (NPoS)
NPoS is a variation of PoS that broadens participation in network security. Unlike PoS, which relies solely on validators staking their funds to secure the network, NPoS allows token holders, known as “nominators,” to participate by staking their tokens to vote for trustworthy validators. This inclusion promotes decentralization and accessibility, reducing barriers to entry for enthusiasts.
Creditcoin 2.0+ and Real-World Loans on-Chain
Creditcoin 2.0+ has adopted NPoS as part of its latest upgrade, facilitating the setup of nodes by fintech lenders and increasing overall transaction capacity. This transition paves the way for infrastructure sustainability.
The project’s next upgrade, Creditcoin 3.0, will introduce universal smart contracts and interoperability, connecting various layer-1 networks and the Ethereum Virtual Machine (EVM). This development will enable new use cases and markets for real-world assets across multiple blockchains.
To encourage user participation in NPoS, Creditcoin is offering native tokens to those nominating validators, automatically making them eligible for a prize pool.
Creditcoin has been pioneering on-chain real-world loans since 2019, enabling financial services for consumers in emerging markets. To date, it has conducted over 4.2 million loan transactions worth $79.7 million, benefiting 337,000 customers, predominantly in emerging economies. By allowing these regions to build decentralized credit reputations and take control of their finances, Creditcoin contributes to local economic growth.
The project’s commitment to blockchain utility and real-world impact underscores the potential of blockchain technology in addressing financial inclusion and driving economic empowerment.